Three more New Hampshire health care providers have joined Dartmouth-Hitchcock in an experiment to control costs and improve quality for the state’s Medicare population.

All three institutions – Manchester’s Catholic Medical Center, St. Joseph Healthcare in Nashua and Exeter Health Resources in Exeter – officially joined Dartmouth-Hitchcock’s accountable care organization, or ACO, at the turn of the new year. In joining the ACO, which has been renamed “allwell,” the organizations are agreeing to collaborate with the state’s largest health care system to improve coordination of care for patients and, they hope, save money.

Their inclusion doubles the number of New Hampshire residents who are being cared for under the ACO model, to 46,700 Medicare patients.

There are now five health care providers in the ACO, as New London Hospital joined last year. Bringing the three hospital systems on board would expand efforts to move toward a new model of care, in which providers are encouraged to collaborate rather than compete for patients, hospital officials said.

Many Dartmouth-Hitchcock patients already see doctors at CMC, St. Joseph and Exeter, and this collaboration would help streamline services and improve quality while avoiding costly duplication of efforts, said Barbara Walters, Dartmouth-Hitchcock’s senior medical director for regional practices, who is leading the project.

“It makes perfect sense,” Walters said.

In a news release yesterday, officials at the three health care providers said they hoped to find a better way to care for patients in a rapidly changing environment for health care.

“Health care delivery will continue to evolve as health care organizations adapt to health care reform. CMC’s participation in the allwell ACO will enable us to better serve the needs of our community as we look across the continuum of care,” said Joseph Pepe, president and CEO of Catholic Medical Center. “We must participate in these types of risk-sharing models to continue to serve our communities’ best interest, which is to provide the highest patient satisfaction, lowest cost and best outcomes to our patients, because that is what matters most.”

“We understand that the health care system of this country is in need of change – to make it more affordable, accessible and sustainable,” said Kevin Callahan, CEO of Exeter Hospital. “Working together with Dartmouth-Hitchcock and other health systems in the state, Exeter is playing an important role in bringing about that change.”

The central tenet of ACOs is that doctors and hospitals should be held accountable not only for treating patients once they get sick, but also for helping to keep them out of the hospital and doctor’s office to begin with.

Start of ACOs

Developed at Dartmouth and included in the Affordable Care Act, the ACO concept is aimed at reining in health care spending while maintaining, or even improving, the quality of care. If successful, ACO providers get to split the savings with the federal government. But it is not without risk. If costs go above a certain threshold, then hospitals share in the losses.

Many of the original 32 “pioneer” ACOs throughout the nation ended up losing money in 2012, the first year of the program. Fewer than half – 13 of the 32 – were able to produce enough savings to be shared with Medicare. Just as many ended up losing money and, after one year, nine ACOs left the program.

Dartmouth-Hitchcock was among the few that came out a winner when Medicare released the results last July. Dartmouth-Hitchcock was able to hit all 33 benchmarks for quality and saved $1.7 million while caring for more than 17,000 New Hampshire residents.

New London Hospital came on board last year, becoming the first provider in the state to join Dartmouth-Hitchcock’s ACO. When it joined, the hospital was taking a leap of faith. The results for the first year had not yet been released and New London was essentially trusting that, in working with Dartmouth-Hitchcock, the small hospital would not be financially punished.

Some types of ACOs are more risky than others. The one that Dartmouth-Hitchcock launched in New Hampshire bears the most risk for the institution, because it not only shares in the spoils if it saves dollars, but it could also lose money if patient costs rise. Another model, which Dartmouth-Hitchcock launched with Fletcher Allen in Vermont, allows hospitals to share in a more modest proportion of the savings, but there is no penalty if costs go up. The Vermont ACO, called OneCare, includes all hospitals in Vermont and just finished its first year. The results have not yet been released.

St. Joseph CEO Rich Boehler said he has watched closely Dartmouth-Hitchcock’s rollout of the ACO in New Hampshire. St. Joseph wasn’t ready to join when the effort launched two years ago. But the Nashua-based health care system has made changes that align with Dartmouth-Hitchcock’s vision for “population health,” a concept in which providers concentrate on improving the health outcomes of a group of people, and look at some of the social, political and environmental factors that influence their well-being.

“We wanted to see how this would unfold,” Boehler said of the ACO. “Two years ago, we weren’t as prepared to take on risk and do population health management the way we are today.”

Prior try with Manchester

In 2011, Dartmouth-Hitchcock ended an effort to form an affiliation with Catholic Medical Center, after then-state Attorney General Michael Delaney objected to the plan, likening it to a takeover of CMC by Dartmouth-Hitchcock. Delaney said it would “result in a profound change to the governance structure” of CMC and keep the Catholic hospital from being able to carry out its charitable mission. The proposal to merge a Catholic hospital with a secular medical center also drew strong opposition from abortion opponents.

The ACO is not about merging hospitals. Dartmouth-Hitchcock does not want to “own” the other hospitals or take over New Hampshire’s health care system, Walters said. Each would continue to stand alone.

“This model doesn’t change anything at all, about CMC’s mission strategy, corporate structure, St. Joe’s or Exeter’s, nor does it change anything about Dartmouth-Hitchcock,” Walters said. “It really is patient-centered, all about the patient.”